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| Facebook acquires Instagram for $1 billion |
Today, Facebook acquired Instagram, the well-known photo sharing, mobile-only application. While previously only available to iPhone users, Instagram was just recently released to Android users. This mobile application allows users to take photos and apply their own personal filters to make their photos more personalized. These photos can then be shared via most social media websites and applications.
Mark Zuckerburg, Facebook’s founder, released a blog post this morning sharing the news about the new acquisition. Today’s deal was the carried the biggest price tag for a mobile application. The $1 billion dollar deal far supersedes the $200 million dollar acquisition of OMGPop by Zynga. Zuckerburg claims that Instagram will most likely remain unchanged and work the same way – but we heard claims like that about Facebook. Some Instagram users say that it’s only a matter of time before Instagram gets a Facebook-style facelift and the thought of this has some Instagram users running for the door already.
What does this acquisition mean for the mobile-only application? With a price tag of $1 billion dollars, Facebook just acquired its main competition for photo sharing. Facebook probably won’t make the $1 billion dollars back, but it was a very smart and competitively defensive move on Facebook’s part. One of the most popular activities for Facebook’s 850 million users is photo sharing. According to USA Today, an average of 250 million photos are uploaded everyday.
So what is the future of Instagram’s mobile application? Let us know your thoughts in the comments.
I agree that this is a defensive move by Facebook. Photo sharing among users has exploded. I'm also wondering how much of this decision is based on patent technology. Facebook faces some threats with law suits at this point.
ReplyDeleteI think that Facebook's decision also is just an effort to make Facebook stay relevant. Instagram primarily would feed into Twitter accounts previously, and I'm sure Facebook just needed another edge to make them stay on the same level. Since the Facebook is seeing diminishing returns in a saturated market, it was probably a good move to take control of something that is still gaining interest among users. I am sure Facebook will figure out a way to incorporate sponsored ads into it in the future (even though it won't offset the $1B purchase price).
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